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New Measures to Save Energy Sector
On 10 August 2012, the Ministry of Environment, Energy and Climate Change launched a series of drastic new measures in an effort to address the issue of the debt amassed by DESMIE, in relation to the Renewables Account used to pay renewable operators. Taxand Greece investigates the cause and effect of the new measures.
The Ministry's announcement stated that the measures were aiming to save the energy market from a "potential collapse", as the debt was estimated to be over 300 million euro in July 2012.
The contributing factors are considered to include, among others, the distortions in the regulatory framework, miscalculations in the income expected to accrue to the Renewables Account (e.g. from the sale of the CO2 emissions rights), as well as unpaid debts by companies such as Energa and Hellas Power (an estimated 170 million euro remains frozen in their bank accounts pending investgations).
The above factors have led the Ministry to adopt a series of radical measures. One of the more important proposals for multinationals to note is the disassociation of levies, which are totally irrelevant to the power consumption from the electricity bill. Such levies include the TV duty, local authority taxes, and the recently imposed property tax which has caused serious problems to end consumers. Another measure which is of crucial importance to the viability of the energy markets is the proposed reduction of the excessive Special Tax Levy. Of course, the reduction of such taxation is not a measure that can be decided by the Regulatory Authority for Energy.
In order to stablise the energy market the Greek Government will have to make changes in many sectors, with taxation being the first port of call for raising funds. The above measures are only part 1 of Greece's strategy, therefore multinationals should be on the look out for legislation adaptions and the effect these may have on foreign taxation.